The American shale revolution came so quickly, and with such force, that the supportive infrastructure necessary to get the oil and gas to market hasn’t been expanded fast enough to accommodate it. Though the U.S. has the world’s most extensive network of pipelines by far, the layout hasn’t been fully connected to the Bakken shale formation in an otherwise unremarkable area of North Dakota. As the WSJ reports, producers have had to rely on the country’s rail network to transport crude to refineries:
The Bakken has become one of the most prolific oil-producing regions in the country, but most of its more than 1 million barrels a day of crude output is shipped by rail. […] Moving oil by rail costs more but gives oil companies and refiners flexibility to deliver crude to the most profitable coastal markets.
But moving oil by rail is expensive, not to mention dangerous, and building out pipeline infrastructure will bust up bottlenecks and connect new sources of shale hydrocarbons to larger networks. And now, the WSJ notes, three new pipelines are set to do just that by 2016:
Pipeline news announced this week indicate another 885,000 barrels of oil a day could be carried out of the state by 2016 on three different pipelines.
This is of critical importance if we want to keep this phenomenon going. As drillers exhaust the most promising plays in these shale formations, they’ll be forced to drill trickier wells for lower profit margins. Technological advances and a high price of oil will make drilling many of these reserves economically feasible, but reducing transport costs will also be essential, if we want this energy renaissance to continue.